Sartorius Stedim Biotech S.A. Investor Relations
A Trusted Partner for the Biopharmaceutical Industry and Laboratories
Sartorius Stedim Biotech is a leading international partner for the biopharma sector. Our solutions are supporting our customers to develop and produce drugs safely, timely and economically. The Group has been annually growing by double digits on average and has been regularly expanding its portfolio by acquisitions of complementary technologies.
Seven reasons to invest
- Clear focus on the attractive biopharma sector
- Long-term growth drivers and significant market entrance barriers
- Market leading position in key technologies and recognized brand
- High share of recurring revenue as well as diversified earnings base
- Strong presence in growth regions
- Proven track record with alliances and acquisitions
- High continuity with respect to customer base, employees and management
Sartorius Stedim Biotech | H1 2021 Results
- Sales revenue up 61.1 percent to 1,352 million euros; underlying EBITDA margin 36.1 percent
- Dynamic organic growth; added momentum from pandemic-related business and acquisitions
- Forecast for 2021 raised yet again at the beginning of July
Strategy and Targets for 2025
Sartorius Stedim Biotech’s goal is to continue its profitable growth and systematically expand its position as a leading international partner for biopharmaceutical research and the industry. We are pursuing various strategic initiatives to grow sustainably up to 2025 – and beyond.
As early as 2018, management outlined its strategy and long-term ambition for the period of 2020 to 2025. The 2025 targets have now been raised, given the strong results achieved in 2020 and the resulting increase in the baseline values, as well as expectations of future organic growth.
Accordingly, Sartorius Stedim Biotech now plans to increase its consolidated sales revenue to about 4 billion euros in the five-year period up to 2025 (previous target: around 2.8 billion euros). The company intends to achieve this increase primarily through organic growth as well as additionally by acquisitions. The Group’s underlying EBITDA1 margin is forecasted to rise to around 33 percent (former guidance: around 30 percent).
These projections are based on the assumption that on average the margins of future acquisitions will initially be somewhat below and, after integration, at a level comparable to those of the Group’s existing businesses, and that there will be no relevant changes in the key currency exchange rates.
Management points out that the dynamics and volatilities in the life science and biopharma sectors have increased over the past years and the coronavirus pandemic has further amplified this trend, so that multi-year forecasts show even higher uncertainties than usual.
1 Sartorius Stedim Biotech publishes alternative performance measures that are not defined by international accounting standards. These are determined with the aim of improving the comparability of business performance over time and within the industry
- Underlying EBITDA: earnings before interest, taxes, depreciation and amortization and adjusted for extraordinary items
- Order intake: all customer orders contractually concluded and booked during the respective reporting period
- Relevant / underlying net profit: profit for the period after non-controlling interest; adjusted for extraordinary items and non-cash amortization, as well as based on a normalized financial result and a normalized tax rate
- Underlying earnings per share: relevant / underlying net profit for the period divided by the number of shares outstanding
- Ratio of net debt to underlying EBITDA: quotient of net debt and underlying EBITDA over the past 12 months, including the pro forma amount contributed by acquisitions for this period
- CAPEX ratio: investment payments in relation to sales revenue for the same period
We focus in both divisions on the attractive biopharmaceutical market characterized by long‑term and stable growth trends.
Key Growth Drivers
- Growing world population
- Increasing incomes and better access to healthcare services in emerging economies
- Aging population and rise in age-related diseases in industrialized countries
Medical progress is also fueling growth, resulting in the ongoing development and approval of new biopharmaceuticals and in the improvement or expansion of indications for already existing active pharmaceutical ingredients. Therefore, a growing number of biotech medications are being approved for treatment of rare diseases considered incurable until now, and innovative cell and gene therapies are projected to further drive growth in the biopharma sector.
Sartorius Stedim Biotech has leading market positions in core technologies and is continuously expanding its portfolio by new, complementary technologies that help our biopharma customers develop and manufacture medications faster and more easily. Our strength in selecting suitable partners or acquisition candidates is based upon our in-depth understanding of applications. We are thoroughly familiar with our customers’ requirements and their entire value-added chains, and particularly understand the interactivity of the systems they use. Our innovation strategy is based on three pillars:
- Integration of innovations through acquisitions
- Alliances with partners
- Own product development
North America and selected countries in Asia are at the focus of our growth strategy.
North America is the world’s largest market for both the development and the manufacture of biopharmaceuticals. Because North America is home to the main competitors for both company divisions, Sartorius Stedim Biotech has historically lower market shares in this region than in Europe and Asia. Accordingly, the company is striving to gain market share, primarily by strengthening its sales and service capacities.
Our second regional focus is on Asia, especially on China, South Korea and India. These markets have tremendous growth potential due to their increased healthcare spending by private households and governments. In these regions, Sartorius Stedim Biotech has invested in its sales infrastructure and is planning to expand its production capacities.
Moreover, we are investing in the digitalization of our processes. In addition, we have substantially expanded our production capacities, above all for filter and bag products.
Based on the dynamic business performance in the first half, strong order intake, and on expanded production capacities, Sartorius Stedim Biotech raised its full-year 2021 growth forecast again at the beginning of July.
At the same time, management points out that this guidance continues to be subject to higher uncertainty than usual due to the pandemic and is particularly based on the assumptions that supply chains will remain stable and production lines will stay up and running.
Management now anticipates sales growth of around 48% (previously around 38%) of which about 20 percentage points are expected to be contributed by business related to the coronavirus pandemic (previously about 18 percentage points). The acquisitions made in the previous year are overall developing slightly better than expected, but due to the overproportionate sales realization in the second half of the year, the contribution to growth to be reported as non-organic now is expected to be 4 percentage points (previously 5.5 percentage points).
Regarding profitability, an underlying EBITDA margin of about 36% is forecasted (previously about 33%).
Due to sales revenue that is now expected to be higher, the corresponding ratio of capital expenditures (CAPEX) to sales revenue for the Group is projected at about 12% (previously around 14%). The focus of the substantial investments is on the partly extended and accelerated expansion of production capacities, primarily at sites in Germany, Puerto Rico, China, and South Korea. Net debt to underlying EBITDA is expected to be around 0.5 at year-end (previously around 0.6). Possible acquisitions are not included in these projections.
Mid-term guidance unchanged
Mid-range targets updated in January 2021 remain unchanged and assume that by 2025, consolidated sales revenue will increase to around €4 billion at an underlying EBITDA margin of around 33%.
As in previous years, all figures are given in constant currencies. In addition, the company assumes that the global economy will increasingly recover as the current year progresses and that supply chains will remain stable.
Sartorius Stedim Biotech S.A. is the parent company of the Sartorius Stedim Biotech Group. It is headquartered in Aubagne, France, and listed on the Euronext Paris.
Approximately 74% of the share capital and around 85% of the voting rights of Sartorius Stedim Biotech S.A. are held by Sartorius AG. Sartorius AG is a leading international bioprocess and laboratory equipment and technology provider headquartered in Göttingen, Germany, and listed on the Frankfurt Stock Exchange. It operates two divisions: the bioprocess business as a subgroup under its parent corporation Sartorius Stedim Biotech S.A. and the laboratory business as a further subgroup.
Half-Year 2021 Results
July 21, 2021
First-Quarter Results January to March 2021
April 21, 2021